Loss of function mutations of the heparan sulfate proteoglycan gene glypican-3 (GPC3), causes an Xlinked disorder in humans known as Simpson Golabi Behmel syndrome (SGBS), a disorder associated with both pre- and postnatal overgrowth, a predisposition to certain childhood cancers, and a complex assortment of congenital defects. Mice bearing mutations in this same gene have similar features to humans with this disorder. Based primarily on in vitro studies, a number of biological activities have been ascribed to GPCS. The challenge has been to determine which of those functions are specifically associated with phenotypes seen in vivo, and whether these activities are unique to Gpc3. Addressing these issues are the long-term objectives of this proposal. While characterizing the development of Gpc3 deficient mice, we identified a previously unrecognized role for Gpc3 in the development of osteoclasts. In further characterization of these animals we have found that this phenotype arises due to an even broader role for Gpc3 in hematopoietic development. Specifically, loss of Gpc3 is associated with a defect along the common lineage leading to the differentiation of bone marrow precursors of the PMN, monocyte/macrophage, as well as the osteoclast cell lineages in vivo. Other cell types of the myeloid and lymphoid cell lineages are unaffected. This implies a unique role for Gpc3 in specific committed progenitor cells and is consistent with our preliminary findings that Gpc3 expression is highly restricted to rare progenitor cells of the hematopoietic lineage. We have further established that embryonic stem cells terminally differentiate along this lineage in a Gpc3-dependent fashion in vitro. This is the first in vivo demonstration of a functional requirement for any specific heparin sulfate proteoglycan in this particular aspect of hematopoiesis. Understanding this function has the potential to contribute to the broader understanding of the pathophysiology of diverse human diseases resulting in deficient production of these blood cells, hematological malignancies, as well as disorders involving bone homeostasis. Our short-term objectives are to pinpoint the biological mechanisms underlying the effect of Gpc3 loss of function on hematopoietic differentiation, and to use the in vitro hematopoietic differentiation of ES cells to establish the structural requirements and specificity of this function of GPC3.